Cooperative banks were once a regular part of the banking landscape in Massachusetts, with more than 150 in operation before the merger and acquisition spree of the 1980s. Now, there are only about 50 cooperative banks left in the state and a handful on the South Shore, including Braintree Cooperative Bank (BCB).

By Dan Schneider

The Patriot Ledger, Quincy, MA

By Dan Schneider

Posted Aug. 21, 2013 at 12:01 AM
Updated Aug 21, 2013 at 9:02 PM

By Dan Schneider

Posted Aug. 21, 2013 at 12:01 AM
Updated Aug 21, 2013 at 9:02 PM

BRAINTREE

» Social News

Cooperative banks were once a regular part of the banking landscape in Massachusetts, with more than 150 in operation before the merger and acquisition spree of the 1980s. Now, there are only about 50 cooperative banks left in the state and a handful on the South Shore, including Braintree Cooperative Bank (BCB).

When Paul Pecci becomes the new president and CEO at the end of August, he plans to do what the bank has done for the past 124 years: pursue strong, sustainable relationships with the community and local businesses, and ignore what he calls “fancy” financial products.

By definition, a cooperative bank is a banking institution that’s owned by its depositors rather than a group of profit-driven shareholders. So there is little sense, Pecci says, for his bank to strive for runaway growth and lavish profits.

Studies have shown that cooperative banks fared better than larger institutions during the Great Recession. Was that true for BCB?

We didn’t get into any of the fancy stuff, the more risky business that bigger banks and other financial institutions like mortgage companies did. We were very locally focused, and didn’t get involved in any large-scale lending outside of our immediate area.

There are not only rigid regulations on the federal side, but by the state as well. So we were less likely to get involved in anything that could turn around and bite us.

We’ve got about $250 million in deposits, and have grown slowly and securely over the last 125 years. We don’t believe in growth for growth’s sake – it’s got to be secure, and it’s got to be sustainable.

Do you offer investment services as well?

Well, when the Glass-Steagall Act came out, it gave financial institutions opportunities to branch into different areas.

For us, it gave us the opportunity to, through a separate corporation named Braintree Investment Services, offer other types of investments.

But they’re totally separate companies. We don’t mix the two together – church and state. That said, it’s a great symbiotic relationship because when a customer sits down with us we can assess their needs and offer them a full range of services.

What areas do you invest in most frequently?

Our major product on the investment side is residential lending. We then have a commercial portfolio, and we invest in local companies, small business loans targeting attorneys and professionals in Braintree and the surrounding towns.

By statute, we can only lend a certain percentage of our capital, so we can’t get into the mega projects that may bring in a lot of money, but could also lead to massive losses if they go south.

Page 2 of 2 - I think that’s ultimately a bigger positive than a negative.

Have you had any difficulty complying with new federal banking regulations?

There’s always new regulations coming down, and Dodd-Frank brought in a plethora of new regulations. But a lot of the new rules from Dodd-Frank were just “best practices” that we’d been observing already.